What you need to know about Circular Economy-Enabled technology

What you need to know about Circular Economy-Enabled technology

Although 70% of businesses plan to participate in the Circular Economy, only 12% have integrated their digital and circular strategies. Meaning, there is a lack of direction on how to use Digital Technologies to maximize resource efficiency and productivity for a circular plan.

Big data, machine-to-machine connectivity and advanced recycling systems are opening up new possibilities for businesses, like extending control over items beyond the point of sale to product returns, creating closed-loop operations, instantly tracking the conditions of assets to minimize waste, maximizing the utilization of products, or replacing polluting materials with bio-based alternatives. Digital technologies and design & engineering technologies are two main categories of Circular Economy enabling technologies a company can choose when it develops its business strategy.

Digital technologies can improve asset control both during and after the product is discarded, favoring Circular Economy strategies such as increasing utilization rates or extending the asset's life through predictive maintenance and real-time information on the asset's condition. Some digital technologies, such as mobile phones and digital platforms, rely mainly on user engagement. In this regard, the shrinking digital gap creates a significant potential for Circular Economy-oriented businesses to expand into new markets in developing countries as their client bases continue to grow. While developed countries have long been accustomed to extensive use of computers, cellphones, and the Internet, most people have had access to these technologies for decades; half of the world's population remains offline and unable to participate in the digital economy.

Internet of things (IoT)

Global wireless network coverage enables the rapid growth of IoT, which allows for data sharing and processing without the need for human intervention or interaction, and advances in sensor technology, which allow for the immediate exchange of multiple pieces of information (e.g., location, usability, deterioration, and many more.) about a machine or other objects. This continuous flow of data can then be used to provide descriptions, forecasts, or prescriptions for how to use the good.

How to extend the operational life of an asset:

Caterpillar used IoT technology to predict damage and perform timely maintenance on its fleet of autonomous mining trucks in Western Australia. Caterpillar operators may get real-time information on the state of several essential components, including filters and oil pressure, thanks to a set of sensors mounted to each machine.

How to reduce the amount of waste produced?

IKEA has introduced an IoT solution at several of its restaurants and Swedish Food Markets as part of its "Food is Precious" project, helping the firm substantially reduce food waste. Waste is a part of their Circular Economy Strategy. IKEA kitchen employees can use a smart scale to track waste by food type and modify menus and quantity. In addition, a comprehensive examination of the food sector would reveal potential improvements farther up the supply chain when food goods are shipped several times from one player to another. 

How to reduce the usage of natural resources?

In the agriculture market, IoT solutions are fast gaining traction, lowering water and fertilizer use and, as a result, prices. For example, CropX, a Tel Aviv-based firm, has developed an innovative low-cost soil monitoring system that helps farmers better understand their fields' water demands using a combination of in-ground sensors and cloud analytics tools. As a result, the system can enhance crop yields while reducing water usage by one-third, which aids in natural capital regeneration. Large sensor manufacturers such as Bosch and Flex have invested in the startup, which already serves 20 of the largest farms in the United States (formerly Flextronics).

Innovative traceability systems:

Businesses use innovative traceability systems to help trace the origins of products and eventually facilitate post-use operations like collection, sorting, and recycling. The Circular Content Management System (CCMS) is a cloud-based platform launched by Dutch Awareness to track and trace garments and their materials as they move from the point of manufacturing across the entire supply chain. Detailed information on the product's materials, the way it was manufactured, and the environmental impact are attached to the garment through a bar code that any operator or customer can scan with a smartphone. The innovation is meant to boost reverse cycle operations in the garment industry.

Track and Return Systems 

Trace and return systems increase cost-effectiveness in collecting and processing discarded materials through, for example, asset identification and efficient material sorting machines. Through its asset recovery program, global technology company Ricoh collects and re-processes supplies, parts, and components – like toner cartridges to re-market them. The recovery of pre-owned materials is facilitated by the company's proprietary trace and return system, Ricoh Asset Management System (RAMS), which gives real-time information on each returned item through serial number codes linked to product components. The collected data is then sent to Ricoh staff, who can track and govern assets to be re-used and materials to be remitted to certified recycling partners. The system is already deployed in more than 20 sorting centers across Europe.

Many businesses across industries are starting to leverage a new generation of highly innovative and sometimes relatively cheap technologies to tackle the threats (for example, resource price volatility and more demanding regulatory environmental frameworks) and take advantage of the opportunities (for example, urbanization). As a result, most of these forward-looking companies boost their bottom lines while concurrently making operations, processes, and products more environmentally sustainable.

Identifying the right Circular Economy enabling technology must be placed at the heart of a company's Circular Economy strategic process. Therefore, performing an in-depth assessment of the different solutions available and monitoring their evolution is an important activity that allows for a better understanding of the possibilities for growth, repositioning and sustained competitive advantage, and more. 

To learn more about how you can strategize, plan and implement digitally-enabled circular economy initiatives, schedule a call with Kudoti.

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